EXHIBIT 99.1

                HEI, INC. ANNOUNCES AMENDMENT TO CREDIT AGREEMENT

    MINNEAPOLIS, July 7 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII)
( http://www.heii.com ) announced today that it has entered into an amendment to
its Credit Agreement with Beacon Bank. The amendment calls for a continued
maximum borrowing capacity of $5.0 million, subject to availability based on
accounts receivable balances, at an interest rate of Prime plus 2.75% on net
funds borrowed. In addition, borrowings will be subject to an immediate discount
of .85% for processing. The facility is backed by our accounts receivable and is
additionally secured by inventory and general intangibles. The term of the
credit facility was extended to September 1, 2006 and is not subject to any
restrictive financial covenants.

    "We are pleased that Beacon Bank was willing to provide us these improved
terms in recognition of our improved balance sheet and operating results. These
revised terms will reduce our borrowing costs as we work to continue to grow the
Company," stated Mack V. Traynor, President and CEO.

    HEI, Inc. designs, develops and manufactures microelectronics, subsystems,
systems, connectivity and software solutions for OEMs engaged for the medical
equipment and medical device, hearing, communications, and industrial markets.
HEI provides its customers with a single point of contact that can take an idea
from inception to a fully functional, cost effective and manufacturability
product utilizing innovative design solutions and by the application of
state-of-the-art materials, processes and manufacturing capabilities.

    Headquarters & Microelectronics Division   PO Box 5000, 1495 Steiger Lake
                                                Lane, Victoria, MN  55386
    -- Advanced Medical Division               4801 North 63rd Street,
                                                Boulder, CO  80301
    -- High Density Interconnect Division      610 South Rockford Drive,
                                                Tempe, AZ  85281
    RF Identification and Smart Card Division  1546 Lake Drive West,
                                                Chanhassen, MN  55317

    FORWARD-LOOKING INFORMATION
    Information in this news release, which is not historical, includes
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Statements contained in this
press release, including the integration of the Advanced Medical Division, the
implementation of business strategies, growth of specific markets, improved
results and the estimated HEI revenue, cash flow and profits, are forward
looking statements. All of such forward-looking statements involve risks and
uncertainties including, without limitation, continuing adverse business and
market conditions, the ability of HEI to secure and satisfy customers, the
availability and cost of materials from HEI's suppliers, our ability to satisfy
financial or other obligations or covenants set forth in our banking agreements,
adverse competitive developments, change in or cancellation of customer
requirements, the integration of the Advanced Medical Division, collection of
outstanding debt, HEI's ability to succeed on the merits and defend against
litigation, and other risks detailed from time to time in HEI's SEC filings. We
undertake no obligation to update these statements to reflect ensuing events or
circumstances, or subsequent actual results. See risk factor in annual report on
form 10K for year ended August 31, 2004.

/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, both of HEI, Inc.,
+1-952-443-2500/ Web site: http://www.heii.com /